Corporate Governance and the Value Relevance of Financial Information in Tanzanian Savings and Credit Cooperatives: A Panel-Data Approach

Abstract

The study examined the influence of corporate governance on the relevance of financial information towards the value of Savings and Credit Cooperative Societies (SACCOS) in Tanzania. Thus far, evidence on how corporate governance influences the relevance of financial information in cooperative societies is limited globally, notably in emerging economies.  Therefore, this research contributes to the body of knowledge by extending the application of agency theory to determine this relationship among variables. The study specifically employed a quantitative panel data set of 202 SACCOs from 2013 to 2020 that was gathered from yearly financial reports and processed through descriptive analysis and regression models. Descriptive statistics demonstrate that the SACCOs' value in Tanzania is increasing. Empirical results show a significant positive relationship between earnings financial information and the value of SACCOS; the book value of equity financial information insignificantly influences the value of SACCOS. The findings deliver empirical and theoretical backing for the notion that board size, skills and supervisory committee skills have a significant impact on the relevance of financial information towards the value of the firm. However, the examination showed no proof that the number of meetings affected the relevance of financial information. This implies that Policymakers should make reforms that will enable SACCOs to improve the quality of financial information and widen the publication of financial reports through effective corporate governance, including the emphasis on online publications.